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Norway pension giant to include Shell’s Niger Delta operations in “ownership efforts”

Government rejects advice to put company under formal observation

The Norwegian government has rejected the advice of an ethics panel to put oil companies Shell and Eni under formal observation over their Niger Delta operations, calling instead for them to be included in “ownership efforts” for up to 10 years by the country’s NOK4.7trn (€577bn) Government Pension Fund.
The Council on Ethics, which advises on divestments from the giant fund, had called for the companies to be put on watch for up to four years “due to severe environmental damage” caused by oil production in the Niger Delta in Nigeria.
The fund has a 2.34% stake in Shell worth around NOK29bn and a 1.9% stake in Eni worth some NOk9bn.
The Council found that “national legislation, international standards and Shell’s own standards have been regularly breached”. But in a five-page recommendation, it said that despite the serious circumstances, it did not recommend excluding the company due to “exceptionally great uncertainty about future developments”. It said: “Shell expresses a willingness to change and, as an operator, has good qualifications for creating change.” It made similar remarks about Eni.

The Finance Ministry said it has decided to ask Norges Bank, which runs the fund, to include oil spills and the environmental conditions in the Niger Delta in itsownership efforts. It has also declined to act on a recommendation from the Council on Ethics to exclude mining giant AngloGold Ashanti over an “unacceptable risk” that its operations in Ghana are responsible for severe environmental damage and contributing to “serious and systematic” human rights violations.
Instead, it is asking Norges Bank to raise issues about environmental damage for five years.
The government said Norges Bank “considers that active ownership can contribute positively in this case” and that AngloGold Ashanti has recently taken steps in the right direction.
In contrast, the government has decided to follow the advice of the panel and exclude five companies.
Malaysian timber firms WTK Holdings and Ta Ann Holdings, China-based Zijin Mining Group and Peruvian miner Volcan Compañia Minera are excluded for “severe environmental damage”.
And India-based fertilizer group Zuari Agro Chemicals Ltd. is also excluded over risks it is contributing to “the worst forms of child labour”.
The ministry says it is satisfied that all the panel’s recommendations “establish with reasonable certainty” that investments in the companies above represent an unacceptable risk of violating ethical guidelines. Link